Cryptocurrency is the hot new buzz word in tech circles and there is so much buzz about cryptocurrency that people are even starting to talk about it around their dinner tables in suburban America. In addition to questions about whether the bubble will burst, when, and how high it will go, there are also discussions about legalities, taxes, and potential scams. Cryptocurrency is still completely misunderstood by the vast majority of the population, which has opened the market up to abuse and scams. But not all cryptocurrencies are scams, and if you are even thinking about investing in any of them you need to understand the basics first.
First, there is a myth that it is completely unregulated and you don’t have to pay taxes on it. Unfortunately, neither of these points is true. While the Federal government doesn’t view cryptocurrency as an actual currency, it DOES view it as property and you do have to pay taxes in it as such. That means if you do a job and someone pays you in cryptocurrency you still have to report that as income as you would any barter. It also means that if like 50 Cent, you accidentally make $8 million off a pile of cryptocurrency you forgot you had from a few years ago, you are responsible for paying capital gains on that property. So you can’t just go off the grid in America with your cryptocurrency like many people seem to believe.
There is another pervasive myth that it is completely anonymous. While you can set yourself up to be somewhat anonymous, there is no such thing as true anonymity in this day and age and cryptocurrency is no exception.
As cryptocurrency rises in popularity there will be many more myths to dispel. Learn more about these and other cryptocurrency myths from this infographic courtesy of Coin Central.
Last Updated on January 30, 2018.